Thursday, September 1, 2011

President Obama seems to be in support of new legislation barring employers from discriminating against the unemployed. Via Catherine Rampell, here is President Obama:

"Well, there is no doubt that folks who have been unemployed longer than six months have a tougher time getting back into the job market. Now, the single most important thing we can do is just have the economy strong so that employers aren’t as choosy because they’ve got to hire because their businesses are expanding.

But we have seen instances in which employers are explicitly saying we don’t want to take a look at folks who’ve been unemployed. Well, that makes absolutely no sense, and I know there’s legislation that I’m supportive of that says you cannot discriminate against folks because they’ve been unemployed, particularly when you’ve seen so many folks who, through no fault of their own, ended up being laid off because of the difficulty of this recession."

This seems to be in line with much of the administration's efforts to try and get those long-term unemployed back to work. Recent musings on the Georgia Program, which seeks to offer government support to get employees trained in new skills, fit in this vein. While it is true that the reason for the massive increase in the duration of the unemployment is because of a concentration of unemployment in those group of older workers that can't seem to find any new job, trying to tackle a demand problem by getting these people back to the work force will do little but redistribute the burdens of unemployment. For example, if a firm decides to go on hiring binge and they say for every person they hire they will fire one of their current workers, most would respond well that's not really hiring at all. The firm is merely swapping one person from the unemployment line for another. This approach to addressing unemployment is exactly the same formula the administration is using. Without some exogenous force pushing demand up, anyone of these people that may be hired will still be hired into firms that are very reluctant to expand. These people will still be competing in a very tight labor market, where jobs are scarce. While the probability of these long-term unemployed getting hired increases with these proposals, this merely reduces the probability of anyone else seeking a job from getting one. A swing and miss I would have to say.

Tuesday, August 23, 2011

Matthew Yglesias makes the point this morning that the recent events in Tripoli essentially vindicate Francis Fukuyama's theory that western-stlye liberal democracies represent the zenith of political development. I've been keen to this idea since I began reading Fukuyama's new book, "The Origins of Political Order", which I think better elucidates his widely-ridiculed end-of-history theorizing.

What Yglesias (and, indeed, Fukuyama) argue is that within the countries we consider to be the most repressive on Earth, the governing elite continue to rely on the artifice of elections and popular representation to justify their political dominance. The Democratic People's Republic of Korea. Fraudulent Iranian elections. Hamas in Palestine. Do these examples not say something about the desirability of democracy in general?

Not to take this point too far, but this idea seems to lend credence to the notion that we should be firm and unwavering in our commitment to universal human rights. Yes, any appeal to a universal right is bound to stir controversy, but I'm not entirely convinced that Fukuyama was wrong to assume western-style democracy was the end-all-be-all of human politics. Perhaps it just takes some time.

Monday, August 22, 2011

Wow, I don't even know what to make of the arguments contained in this article from Brad Plummer over at Ezra Klein's house. Here is the graph that gets the whole thing rolling:

The graph shows that traffic fatalities per mile driven have been on the decline of late; but even more importantly, there appears to be a general trend towards fewer traffic fatalities during all of our post-war recessions.

Plummer, speaking with the economist who composed the above graph, provides the following theories to explain the trend:

1) less drunk driving: during recessions people have less money, therefore they drink less and therefore there are fewer alcohol related fatalities.

2) during good economies people have places to be and people to see, whereas during recessions people have less urgent demands.

Clearly I am in no position to judge the validity of either theory, but I wonder to what extent the immiseration of a recession effects the distribution of fatalities in general. Could it be that people are dying in different ways during a recession than they would during boom-times and is that showing up in the data as a decrease in traffic-related fatalities?

Friday, August 19, 2011

What we need is a new and bold jobs plan. This creed seems to be igniting much of the political writers currently. Bernstein likes to talk about his FAST proposal, while Khimm has harped on infrastructure banks and other put people to work programs. However, we have been in this current recession for upwards of 3 years. Since the "recovery" began in the 3rd quarter of 2009, our growth has averaged an abysmal 2.5%. Public opinion in regards to the economy is also wallowing in the doldrums. According to Gallup, only 19% of the public currently think the economy is getting better, while 76% think it is getting worse.

Now neither of these figures definitively prove how the economy will do from this point forward, but I think it points towards something often overlooked in government policy debates, the role of self-perpetuating cycles of pessimism. To add a bit of context, let's travel back to 1933. The economy had been experiencing Depression conditions for nearly 4 years. The number of banks in the country had been cut in half, prices had plunged by nearly a quarter, while investment had fallen off a cliff, reduced 77% by 1933. The economy was in a hole, with no way up. In March, a new, bold and silver-tongued President entered office. One of the first acts in office of FDR was a national banking holiday combined with getting the US off the gold standard by devaluing gold and suspending gold contracts. (Side Note: The US did not formerly set a new peg for gold until Jan. 1934, creating some uncertainty, See Federer and Zalewski) Peter Temin sees not only the policy, but what the policy said about the new regime as highly important. The devaluation of gold was a signal, not only of a singular policy change, but of an entirely different way of economically thinking, one that threw off the fetters of gold. This distinction between policy and regime change is what Temin finds most important:

"So, here is the distinction, which is that if you take an action contrary to a regime that it is seen as being contrary to the regime it will have minimum impact because it will be seen as an aberration and it won't be seen as a large thing. So while it may have some effect, the individual action will have very little effect. If on the other hand the regime changes, then the actions interpreted as changes in regime will seem to have larger effects. The difference...is not in the actions..but in the perceptions of the people who are undergoing these actions and responding to them." (Temin as quoted by Parker, 37)

While all of these individual policies the above authors highlight as good individual projects, I don't think they fully grasp the route forward. The US and the global economy is entering a period of incessant pessimism. It seems the opposite of the optimism bias is inflicting consumer and business decisions. Instead of looking for rays of hope shining out there, bad economic news tends to throw people into a dizzy. Loss-aversion has set in, and people who have been burned over the last three years, are heightened to any new signal of stormy clouds on the horizon. Just like someone who has been mugged is very touchy when walking down what others would perceive to be well-lit streets, consumers are afraid of any hints of economic turmoil in the future. In this air of pessimism, singular government projects such as a payroll holiday, unemployment benefits, FAST! etc. will help to keep the unemployment rate down, but they will not get the mood in the country going again. When people say something bold needs to be done, they need to mean it. There is a reason that the Bush administration reshuffled much of its cabinet between its first and second term, with Condolezza Rice meeting with many allies early on to try and a signal new diplomacy. They too wanted to try and show that they were charting a new course.

Though, the Bush administration inevitably committed actions contrary to its new, and more multilateral image, it speaks to the necessity of both real and symbolic action in the face of negative expectations. I'm saying a stimulus with a real price tag that will shock. We should be thinking multiple trillions here. The American Society for Civil Engineers has already projected it will cost between $130-$240 billion, per year, for the next 15 years to update our infrastructure. This area, plus aids to the states, education revamps, an infrastructure bank should ALL be parts of a package. The key is this package must be BIG! Small packages will only mitigate job losses without providing an impetus for changing expectations. Furthermore, this action should be in concert with more symbolic actions. A new jobs commission, recess appointments to key positions on the Fed, and plausibly a new Treasury Secretary would help. Additionally, the bully pulpit needs to be used. Obama must start harping on the need for more spending now, trying to throw off the shackles of austerity rhetoric. What we are looking for is some chutzpah, will the administration and leaders of congress respond?

Thursday, August 18, 2011

How are we to understand the recent outbreak of violence, rioting, and looting in the United Kingdom? Ta-Nehisi Coates, in one of my favorite ongoing series entitled, "Talk to me like I'm stupid", asks to what extent were the UK riots about race?

There are several interesting ways to look at social deviance in general:

1) Durkheim: deviance and the recourse to violence is the product of anomie, a lack of social norms.

2) Merton/Strain Theory: society tells us how to achieve certain goals, yet the means to achieve these goals are not readily available.

4) Labeling Theory: deviant acts are only deviant insofar as they are called deviant by society at large.

5) Hirshi/Control Theory: most people are capable of controlling urges to engage in deviant behavior. Those that are incapable of controlling these urges are not sufficiently "bonded" to society.

6) Marxist Theory: economic and political forces push people in the direction of violence and deviance.

Certainly this is not an exhaustive list, and the sociological literature on criminology and deviance is vast. But I bring this up to showcase a recent post on the Monkey Cage by a guest writer, Erik Bleich. His main argument, stemming from a paper he co-authored about European riots post-1980, boils down to the idea that it's best to take a multi-dimensional view of the UK riots instead of picking and choosing various theories about deviance.

In practice this means instead of calling solely upon the judicial system and police to deal with the aftermath of rioting, many of the European states in Bleich's study opted for a dual approach: namely, they used both the judicial/police apparatus as well as the welfare state apparatus to punish the rioters while seeing to it that the social origins of the deviance were attacked at the root.

Interestingly though, the degree to which each apparatus is called upon is related to the government-in-power's ideological leanings. Right-wing governments are more likely to rely upon the police to punish, whereas left-wing governments are more likely to seek palliative policies to address social decay.

Based on the theories I listed above, it's not entirely clear which policy is preferable. Some of them are more fatalistic and seemingly unsolvable through punishment (e.g. Marxist, strain, labeling theories), while others are more likely to be deterred through punishment or re-education (eg. differential association, control theories).

Wednesday, August 17, 2011

I just got done reading Barbara Strauch's The Secret Life of the Grown-Up Brain. The book is really a wonderful, light and easy walk-through of much of the recent neuroscience research surrounding middle-age. Strauch paints an optimistic picture of the middle aged brain. Instead of general decline, the middle-aged brain gets better at many critical tasks, specifically information integration and sorting through irrelevant information. This is the reason why people with experience or expertise can get the gist quicker about some subject related to their field.

Just yesterday I saw a great example of this. A manager, at a restaurant I was eating at, was dealing with what seemed to be one of the waiter's shirking their responsibilities. When another waiter came up to the manager to point this out, the manager calmly responded with, "Go do his task, and I will deal with everything else. Do not talk to him about it." This understanding of inter-personal dynamics, and the need to keep workers at the same level from fighting among one another, is really something that comes from experience. The book has a whole host of other ideas surrounding how brain aging occurs, and what current research says about how to stop it. Really well worth the 10 or so dollars on Amazon.

Tuesday, August 16, 2011

This has nothing to do with gold, the metal that much covet and that led us into ruin during the Great Depression. No no, this has to do with the new "golden rule" that Merkel and Sarkozy announced in their joint news conference meant to deal with the contagion spreading to Italy and Spain. So what is this golden rule, you may ask. For many this conjures up the biblical notion, "do unto others as you would have done to yourself." Interestingly enough, this interpretation may vindicate an argument I had yesterday with Louis in regards to what exactly Germany is doing. His view is that Germany is merely dictating its own economic policies onto others. The EU exists for Germany to export it's export-driven, private-public ownership model. While it is true that the current policies followed by the ECB are basically the same policies the Bundesbank would've followed, I would not say that many of the privatizations being forced upon Italy and Greece are particularly German in nature. They more fit the mold of every bailout that has been led by Western powers since the IMF decided that the Washington Consensus was the right way to go. But unfortunately for Louis, and the rest of Europe, this "golden rule" has nothing to do with a sinister attempt to make other countries' economies in Germany's image:

In what may likely be the most ambitious proposal, Mr. Sarkozy and Mrs. Merkel outlined a plan for each of the euro zone governments to enact legislation that would constitutionally bind their governments to balancing their budgets. This “golden rule” would be expected to be enshrined in the constitutions of all euro members by the middle of next year, the leaders said.

Ah yes, that's what has been missing from EU negotiations, a balanced budget amendment. Nothing says pick you up by your bootstraps like a little legally binding spending limits. I truly hope this is a political ploy meant to calm down German and French voters fear of a "transfer union". If this is what European leaders really think constitutes coordinated fiscal policy, then we've got a longer road ahead than previously thought.

Saturday, August 6, 2011

US debt was just downgraded to AA+ from AAA. The commentary on whether this was the right or wrong decision could be read anywhere. Ezra, Salmon, and Cowen seem like enough to increase your knowledge base sufficiently. The thing we need to look more into, is the rationale for the downgrade. Here's a good line from the beginning of its report:

"We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process."

So no new taxes and threats over the debt ceiling are the proximal cause. I understand why S&P made this move, it was definitely the correct one. However, the motivation for the decision seems to be that they were hoping to point the government in the right direction. This seems like a scenario where good intentions go awry. How many stories have you read that say the downgrade was related to political, and not economic factors? That in itself makes very little sense to people thinking about US debt ratings. When they hear our debt has been downgraded, the only available reference point for some possible cause is the "spiraling" debt scenario they hear about. Far from helping to clarify the debate, it seems this S&P downgrade will only help to entrench those forces who view a long term debt problem through a short term deficit lens, hardening the sides in the these budgeting debates. Today we have already seen Republican leaders coming out swinging on Obama for letting this happen. This is really a sad state of affairs. How does a country begin its decline? With a dash of internal squabbles and a helping hand from outside powers intervening sounds like a good recipe. I will say it until it doesn't seem apt, but hooray to a lost decade.

Wednesday, August 3, 2011

This being the first posting following the successful passage of the debt ceiling "compromise", I think we should take a moment to ponder one of the most curious components of the deal: the joint Congressional Super Committee, tasked with achieving more than $1 trillion in deficit reduction.

The idea is that without any substantial deficit reduction by the established deadline, automatic cuts will be made to Medicare providers and the Pentagon, thereby inducing the defense and medical industry to lobby in favor of a balanced deficit reduction approach.

To be perfectly honest, I'm not opposed to the logic here. Personally, I'm in favor of acknowledging the fact that interest groups and industry have taken over the government, as opposed to pretending that the people, as voters, have the ultimate say in Washington. It all gets back to the question, can we use the tools of neoliberalism to influence policy in a socially-constructive direction?

I don't know the answer to the question, but I certainly think it's the best way forward in a time of partisan gridlock and manufactured crisis. Make sure the major stakeholders have some skin in the game then let them loose on Capitol Hill.

Sunday, July 31, 2011

A debt ceiling deal has arrived. A trillion dollar in spending cuts for the next year while our economy experienced roughly 1% of growth, mainly as a result government spending and exports. Yet many conservatives see this as a victory for future growth. So the logic goes:

...the thinking behind austerity is not without logic, as the government understands that by reducing business costs it can manufacture the profit that the system is otherwise struggling to generate. And a chief cost that austerity aims to reduce is that of labor, as further diminishing the welfare state will encourage an even more desperate labor force that will, out of the necessity of survival, do whatever it takes for the opportunity to work for whatever is being offered...

I appreciate this line of thinking because for a while now I have been trying to make the connection between the policy that the right-wing (and many Democrats) say they want and the policy outcomes. Krugman recently addressed this in terms of rentiers/creditors vs. producers, but I think Sperber truly gets to the bottom of the dilemma.

All of this is just to ask, what else can Marx tell us about our current plight?

Sunday, July 10, 2011

Because all I've been doing is reading economic history for the last three months, I felt it was time to start putting some tangential thoughts I've been having onto paper. Plus, there is nothing like trying to peak reader's interests by writing about events that happened nearly a century ago. The time we want to venture back to is the fall of 1932. The place is Nevada. Just like most other parts of the country, the Nevada banking system had been severely weakened, as the Great Depression had inflicted three years of economic destruction. Unfortunately, a new run on a major chain of banks started up in November. The Governor opted to use a novel tool, not yet deployed in the crisis, to stem the tide of depositor anxiety, the bank holiday. A bank holiday suspends convertibility of demand deposits into cash, while allowing the bank to carry on most other operations, such as making commercial loans, certifying checks from other banks etc. By suspending any withdrawals, consumer anxiety can cool down, and depositors will hopefully come to their senses, preventing a bank run from spreading.

This idea had worked well in the past, however, during the heightened anxiety of the Depression, it ultimately proved to be a beggar-thy-neighbor policy. Once states started to call banking holidays, the citizens of contiguous states would start freaking out, thinking that their state was next on the list. A self-fulfilling prophecy would occur. Citizens would begin fearing a bank holiday was going to occur and rationally respond by trying to get their money out before the cashier's windows closed. The effect of everyone doing this collectively proved counterproductive as runs started intensifying, forcing a banking holiday to slow things down.

How is this relevant to today seems an apt question? The current debates over the debt situation in the EU seem to be missing out on this distinction. The contagion effect of investors, banks, and currency speculators from Greek default has been well-documented. There is little doubt these people will pull money out of not only Greece, but other troubled countries, such as Portugal and Spain. Many commentators have noted that since a currency run is inevitable, the Greeks might as well get ahead of the storm by creating the crisis themselves and strategically exiting from the Euro. This point misses the distinction between a currency flight occurring because of investor worry versus a self-inflicted policy of a government. The contagion effect of a Greek government decision to exit the Euro would seem to weigh heavily on consumer and business decisions in other EU states.

While it is true that the Greek situation is untenable and a restructuring of their debt will be inevitable, it does not hold much water than an exit from the EU is inevitable. And the argument that a "strategic" exit is possible is truly barren. Any sort of exit would have to be proceeded by a bank holiday of sorts, as the Greek banking system would be forced to shut down convertibility of euros as a national shift to a new currency occurs. With that occurring there seems no way to hold the EU together. Citizens and investors in countries reeling economically such as Spain and Portugal would start recalculating just as those citizens in contiguous states in the Great Depression began recalculating. There is a chance that other well-off states could be brought down as citizens start taking out euros fearing for the liquidity of their bank accounts. The thought that there exists some short-cut out of the debt crisis is wrong. The road will be long and bumpy, and unfortunately with only one route to future prosperity.

Wednesday, April 27, 2011

What precisely are the GOP "ends"? Clearly it's not the overall health and happiness of Americans. How do I know this? Take a look at the Paul Ryan (read: Republican) budget. It's no secret that this legislation deals with health care costs by shifting the burden from the government's budget to citizens' budgets. Health care costs remain the same, but now seniors and the poor have to figure out how to manage these costs effectively.

If the ends are simply to shrink the federal budget then the Ryan/Republican plan achieves this goal. However, what we're left with is a win for libertarianism with no appreciable reduction in human misery.

Monday, April 25, 2011

It's not every day that you write a letter to a respected policy blogger and have him openly admit that the letter changed his viewpoint radically. I now direct you to my letter featured on Matthew Yglesias' digs. The first thing you will notice is that my letter in no way caused a re-think on Yglesias' part, nor did it even contain a point, per se.

The Dallas Morning Newsreported on a construction project about to be undertaken by a Spanish firm along the 635 corridor in North Dallas--my stomping grounds. This five year operation will dig beneath the current highway to build new toll lanes. No additional free lanes will be built, only toll lanes. Most importantly, the price of the toll will fluctuate based on current traffic conditions: during rush-hour (when 635 is unbearable), the toll might be several dollars.

Unfortunately, I was in such a rush to get the email off to Yglesias that he (understandably) mistook my question about whether or not such an operation is likely to "work" as a question only about the likelihood of the toll lanes to decrease congestion and not about the likelihood of the presence of the toll lanes to decrease congestion on the free lanes.

In Tom Vanderbilt's "Traffic: Why We Drive the Way We Do", the author states forcefully that, based on all available studies, building more lanes does not decrease congestion. Rather, more lanes simply invite more traffic. This happens because humans are unusually adept at planning for, negotiating, and avoiding traffic. Therefore, when new lanes appear, it won't be long before commuters recognize the additional lanes and adjust their travel patterns accordingly (i.e. instead of taking I-90 to 35 to work, they will take 635 to 35 thanks to the additional roadway). At first traffic will be noticeably smoother, but we shouldn't expect this to last long as additional cars (containing humans making rational decisions) will fill up the new lanes recreating the congestion the additional lanes were intended to fix.

The question Yglesias took me to be asking concerned the toll lanes. His response: "Naturally, everyone wants to take the free road. But as 'everyone' tries to crowd onto it traffic moves slowly and some people will want to exchange money for time by taking the toll road. And at any given time of day, there’s got to be some price at which the tolled road will be uncongested." So, yes, the toll roads will "work."

But the question I am really concerned with is the free lanes that the average commuter uses on a daily basis. My initial thought was that the more people that opt for the toll lanes, the more space there will be in the free lanes for the traffic that does not want to pay tolls. But one of the commenters to Yglesias' post says this is incorrect, and instead uses the logic of Vanderbilt's book to argue that the free lanes may experience less congestion for a short period of time, but before long, more traffic will come to fill the openings left by those cars willing to pay the toll.

A couple commenters disagree with the basic idea (c/o Vanderbilt) that it's impossible to build enough roadway to counteract the increased amount of new traffic. They argue that people don't drive around aimlessly, so there will not always be a constant stream of new traffic to occupy all available lanes (in other words, drivers will not notice available roadway and drive on it just because they can--remember, drivers are surprisingly strategic).

Another interesting point presented by a commenter is that the more roadway constructed, the less available space for city-living. I would be inclined to agree with this if not for the extreme driving culture that we see in Dallas/Ft. Worth. The infrastructure in Dallas is phenomenal; from the High-Five to the Mix-Master to the DFW-Connecter, our roads are--while certainly headache inducing--beautiful in their utility and vision. The Ancient Romans would, once they understood how we managed to survive without slave labor, marvel at our infrastructure accomplishments. Thus, in Dallas, I believe, road construction could continue on indefinitely (through double-deckers, under-grounders, etc.) without any loss to the spirit that is Dallas.

Whether or not all of this is a good thing for the environment and human prosperity is a different question entirely. Suffice it to say, I am--as I always am--intrigued by the lastest attempt to efficiently move capital from the suburbs and exurbs into the heart of the Metroplex. Forget the impending apocalypse, the Dallas Megalopolis is stunning.

Thursday, April 21, 2011

Holy Math Mistakes Batman! I read a Fox News article claiming that the administration overestimated the savings for its long run budget plan by 1.8 trillion dollars. I knew nothing about this story had to be true. I mean the story doesn't even have a writer's name attached, it most likely was plugged into the algorithms' used to attack any Secular Kenyan Socialist President, but I digress. The interesting tid bit was this story was actually quoting a Committee for a Responsible Budget report claiming that the administration overestimated long-term savings, and the real kicker, Representative Ryan's plan did not. When reading this I knew there was something afoot. Let's go to the charts. This is the first chart of the report, and it appears to show this difference in deficit projections:

Unfortunately if you can see that tiny print at the bottom, the CFRB is using CBO reports on Obama's budget, versus using ummm...no one....to calculate Paul Ryan's budget. My only assumption is they must be defaulting to Ryan's budget calculations. I don't need to rehash the criticisms of this budget proposal, but let's just say Heritage has been reforming its user access to its data sets lately. I just don't understand the point of this report. Why did the CFRB not just put out a detailed analysis of the President's budget? Why did it have to compare it to other budgets if they were not also doing the analysis of those budgets? I wonder if this has something to do with Paul Ryan giving his plan first. By being the first to speak, he became the rule setter of the debate. He was the person out on their own showing courage. Whereas when Obama entered the conversation it became a debate because there were now two opposing arguments. Whatever dynamic is going on here, this seems a tad bit irresponsible to me.

Wednesday, April 13, 2011

I went to see Warpaint last night at The Loft in Dallas. Their set was like their album: clearly brilliant, but repetitive and boring. At the risk of sounding sexist, it's hard to avoid handicapping a band composed entirely of women--but this is the second time this year that handicapping based on sex has been completely worthless. When she played Sons of Hermann Hall a couple of months ago, Marnie Stern's finger acrobatics proved once and for all that male genitalia confers absolutely no musical benefit.

But what a year for women this is! So far we've had releases from Anne Calvi, Braids, Micachu & The Shapes, Joan as Police Woman, The Joy Formidable, The Kills, No Joy, and Tennis. All of which are excellent albums.

Thursday, April 7, 2011

Several commentators have already noted that this budget doesn't reduce health care costs one bit--rather, it takes the costs off the government budget and places them on household budgets. In practice, this means retired seniors will find their savings going disproportionately towards heath care, which was once the prerogative of the government.

This, of course, is directly opposed to one of my pet causes (by way of Jamie Galbraith): early retirement. If we encouraged retirement much earlier than we do today (Galbraith argues for 55) we could free up countless positions for those just entering the workforce, while at the same time making life far more enjoyable for those 55 and older.

The Republicans, it turns out, don't much care for the welfare of middle-class retirees.

Wednesday, April 6, 2011

In thinking about the Paul Ryan budget, I find myself coming back to a debate I held with myself in the run up to the Affordable Care Act. The issue is this: to what extent do I deserve a government subsidy for my consumption of health care services? If we assume that the art of politics is simply the redirection of resources from one group to another, then certainly the ACA represents a shift in resources from the elderly to the younger (insofar as "savings" were discovered within Medicare to fund subsidies for those lacking insurance). Under this assumption, of course I deserve the benefits from the ACA--after all, my cohort voted en masse for President Obama.

However, now the question is a bit less parochial, and instead concerns a particular group of Americans for which I have very little sympathy: senior citizens. Do what extent do they deserve full government subsidy for their consumption of health care services? What I like about this question is that it really makes me confront my neoliberal assumptions, particularly the idea that the government should maximize growth at the expense of full inclusion, and provide a strong safety net for the excluded.

Now, our question has morphed into something even larger: to what extent should the government subsidize anything? How do we measure individual desert in a polity as large as ours, where determining who contributes what to the greater good is hazy at best? When I am confronted with questions such as these, I look towards human social constants; in other words, those peculiar social arrangements that appear again and again throughout history wherever societal development is advanced enough to produce some modicum of organized government action on behalf of a particular group.

During the late Roman Republic, for instance, a conflict broke out that threatened to rip the Republic in half. The plebeians, over time, became massively indebted as a result of land policy that benefited large holders of the patrician class. Then, in a state of complete dependence on creditors, the plebs effectively demanded a leader that would redirect some of those resources to the debtors--a role that populist leaders like Caesar and Pompey were more than willing to fill. Of coure, in the context of the last century BC, where people barely survived long enough to develop serious, chronic ailments, the only good worth subsidizing was food (grain).

Going back and considering ancient antecedents such as this to modern social arrangements helps me to separate the ageless from the contingent, what's human from what's merely a product of capitalism. Back to my original question, a conservative would respond, "you only deserve health care services to the extent that you have earned health care services by participating in the economy (and participating well)." A liberal, on the other hand, would agree that you deserve what you earn, but with the added caveat that if by dint of poor luck you fail in the economy (or are born with a condition that constrains your access and ability to participate in the economy), then you deserve government subsidy for health care.

My view, however, holds that the desire for policy to address inequality is only natural when the disparity in access to resources is obvious to everyone. As was the case in 2009; as was the case in 1933; as was the case in 250 BC. In sum, regardless of the fact that senior citizens today (for the most part) represent a rentier class, benefiting from multiple subsidy programs; and regardless of the fact that I am unlikely to develop a chronic condition that requires large amounts of health care services: the essence of subsidized health care points to a deeper human truth than Paul Ryan and others care to admit.

Monday, April 4, 2011

The media has become encapsulated with the nuclear crisis in Japan, but why has the coverage on the after effects of the tsunami been so downplayed. If the theories about disaster pornography, or that humans find some sort of sadistic pleasure out of watching destruction unfold, hold true then why are newspapers not filled with both. It seems that double the disaster would be double the pleasure. But yet, all we seem to see are stories on different aspects of the crises, leaks into the ocean, noxious fumes, contaminated cabbages, and the like. So here are a few theories I have:

1. People care more about the present than the past--the nuclear disaster is one occurring in the the here and now, while the tsunami is in the past. Rebuilding is surely already occurring, the wave has come and gone, while the nuclear disaster is still "breaking news." People seem to have a myopia towards most forms of decision-making, why would disaster coverage be no different.

2. People are intrigued by uncertainty that doesn't negatively affect hem--not knowing what will happen next keeps people on the edge of their seats. Who doesn't love a cliffhanger. The obvious addendum has to be that as long as the resulting effects don't have some negative result on them directly.

3. People discount sunk losses--people feel that those losses that you can't get back should become irrelevant. In economics, this notion is known as sunk costs, those expenditures which once you've spent on them you can't get back. Think of buying a car, the down payment you make, you can't get back. This is a bit different then the temporal issue stated above. People just have a harder time placing as much utility on those lives already lost, versus the future expectation of losses. It's a bit of loss aversion, with a twist.

4. Nukes are a human phenomenon whereas tsunamis aren't--people feel that there is more control with regards to nuclear disasters, with that sense of control comes a sense of superiority. People feel that this is something we can and should master. It's almost a sense of romantic humanism, people are rooting for a solution to a human problem. Tsunamis and other weather related phenomenon are viewed more as a black swan, unpredictable and therefore somewhat irrelevant to dwell over.

Monday, March 21, 2011

Before this Matt Yglesias post gets lost in the Phantom Zone where all posts over a month old go, I wanted to highlight this sentence regarding the GOP's electoral alliance:

There’s a disjuncture between the funding base of a movement focused on rich people’s tax rates and the voting base of a party relying on older working class white people for the bulk of the votes.

As one of my previous posts tried to address, I sense a lot of tension between how the Republicans win elections and what they do once they've won elections, and I wonder how this will play out once the economy starts to normalize towards the end of this decade. And yes, we're only one year into this decade.

Friday, March 18, 2011

Austerity is now in vogue. From the beltway to Main Street, this phrase has infected our political discourse. I use infected intentionally. Budget cutting measures can be done right, but austerity itself invokes a sort of moralistic crusade of belt-tightening. The word austerity is synonymous with such puritanical ideals as Spartanism, simplicity, self-discipline and abstinence. All of these terms give those fighting for swift budget cuts the rhetorical and moral high ground. They play on the United States’ history of protestant ethics, which Weber showed dictate a sense of studious saving and spending patterns. Those that were righteous in our society were those that lived their life not just in moral temperance, but also in economic temperance. We should save for the future, forgo earthly passions in the form of luxury goods, and most of all live within our means. If one did not choose this path they risked eternal damnation, and no one wants to be associated with the damned.

Though this sounds morally persuasive, it is neither morally nor rhetorically persuasive. Let’s pretend you are stuck in a low-paying job and the only chance of escaping is a great new business idea you have concocted. Let’s also pretend that some bank offers to give you a loan for 3% a year that will allow you to realize your dream of self-ownership, and personal wealth. Would you take the offer? In the short run, you will definitely be in more debt, as your business takes time to get off the ground. Over time, however, the benefits will allow you to no longer climb out of that hole, no longer relying on Raman noodles as your only source of nutrition.

Interestingly, this is the exact scenario we as a country are in. Unemployment has been hovering around 9% for months, core inflation is less than 2%, and GDP keeps showing good, but not stellar numbers. Furthermore, the current interest rate on 10-year treasury bonds is near 3%. This is the lowest they have been since we have kept track of these numbers. Furthermore, to quote Mark Zandi, the former chief economist for John McCain’s Presidential campaign, “The stimulus is doing what it was supposed to do: short-circuit the recession and spur recovery.” The government has the opportunity to step in where the private sector is failing and provide an extra jolt in the arm of our economy. Providing increased business tax credits, more direct investment, and aid to states and cities would go a long way towards getting the economy going again.

Why are we not rushing to buy this hugely discounted lunch? The political and media forces in this country have been infected by this avid austerity that borders on ideology. Those that declare themselves budget hawks are deemed righteous and good, while those on the other side of the aisle are deemed weak and impure. Due to this, our current budget debates center over the size of budget cuts, taking for granted the type and necessity of them. That same Republican economist Mark Zandi predicts if the GOP house budget plans were to fully pass then job losses would total near 700,000. Now economic prediction is no set in stone science, but you get the picture. Budget austerity seems to pull on all those heart strings of Americans at the exact moment we should be tackling a different kind of crisis, our unemployment disaster. It is a shame when self-inflicted pain is neither necessary nor productive.

Friday, March 4, 2011

In response to the blatantly socialistic approach to healthcare reform under Bill and Hillary, conservatives rallied around the notion of an individual mandate, which as Reason notes:

Since it's unlikely that Americans will allow their improvident neighbors to expire without medical care in the streets, is there a politically palatable alternative that can preserve and expand private medicine in the United States? Yes: mandatory private health insurance.

I know that much ink has been spilled complaining about President Obama's approach to health reform negotiations, but I have not seen* an argument that says Obama made a strategic mistake in adopting RomneyCare/ReasonCare from the outset because it deprived the Republicans of a legitimate (read: sane) position to hold during negotiations.

Would it have served the administration better to fully embrace single-payer or a robust public option from the outset, and then only slowly back down and adopt an individual mandate without the public option? Instantly emasculating the Republicans by adopting their only health care policy idea that includes universal coverage seems to have been a mistake--but I reserve judgement until the Supreme Court decides on the constitutionality of the law.

*Such an argument may very well exist, but I have no desire to search for it.

Friday, February 25, 2011

I'm sure this is not the most original insight into the current austerity debate in Congress, but it's interesting to me that the Republican economic recovery plan insists on inflicting "painful" cuts, "belt-tightening" and "shared sacrifice" (thereby appearing as the mature, thoughtful adults willing to make the tough decisions on spending), yet the raison d'être of the GOP is to cut the marginal tax rates on the highest earners...

...Does it not seem odd to Republican voters that a particular class of Americans are exempt from our shared sacrifice in the name of the common good? Their argument seems to be: "hey, we realize how odious it looks to cut taxes on the wealthy, and we really wish we didn't have to keep funneling money to them, but it's the only way to make the US solvent again!" Does not pass the smell test.

Thursday, February 3, 2011

Will Wilkinson is one of those bloggers that offers a fresh and usually non-ideological take on economic and political issues . After complimenting him for his great posts, I now feel alright saying that I feel on health care, his logical, non-ideological take has seemed to go astray. Here is him lamenting the sheer genius of Judge Vinson's opinion striking down the individual mandate, and subsequently the rest of the PPACA:

Now, the inclusion of a severability clause is not strictly necessary for a judge to void only part of a bill on constitutional grounds, which is why liberal legal eagles were hoping that the Democrats' failure to do so would not be a problem. However, as National Review's Avik Roy argues in an excellent post, Judge Vinson makes an independently compelling case for the inextricability of the individual mandate, but really drives it home simply by citing Obamacare's own advocates and the text of the bill itself. "In order to overturn Judge Vinson’s ruling upon appeal," Mr Roy notes, "it will be necessary for the government to rebut itself: to disprove its own arguments that the individual mandate is essential to PPACA."This is a ridiculous line of argument. If I say that my tires are a bit flat, and I have a high likelihood of having a blow out and careening off the road, does that mean I can never defend how good of gas mileage my car gets, or how I really enjoy its stereo system? If I say that my shower head is malfunctioning and spraying water at a very slow pace, do I refrain from showering altogether? If a particular writer makes one bad argument, does that mean I should refrain from reading his material altogether? These all seem to be justifiable conclusions from Mr. Wilkinson's logic. By saying that some system will malfunction without a particular part working properly is not the same as saying the system itself is flawed. Judge Vinson could have used any of the above analogies as logical justifications for why fixing the adverse selection and premium death spiral should occur in a constitutional manner without striking down the entirety of the bill. In fact, the conservative creator of the individual mandate idea has recently suggested just that. If only logic were actually the issue here.

Sunday, January 30, 2011

I've been looking for a Marxian take on the financial crisis. It seems there is a new book by David Harvey that takes a look at the crisis. I would have more to say if I weren't so busy on other things in my life, but nevertheless, this book review by Benjamin Kunkel is well worth a read. From the looks of it, this book is vaulting to the top of my reading list.

Friday, January 7, 2011

Apropos Ryan's post on military tech: in an article by Steve Lohr in the New York Times, we are introduced to some neat pieces of technology whose applications are, how do you say, terrifying. Apparently there is a new generation of tech that can see, called "computer vision systems". How would this tech be used?

Perched above the prison yard, five cameras tracked the play-acting prisoners, and artificial-intelligence software analyzed the images to recognize faces, gestures and patterns of group behavior. When two groups of inmates moved toward each other, the experimental computer system sent an alert — a text message — to a corrections officer that warned of a potential incident and gave the location.

In prisons.

A few months ago, the Defense Advanced Research Projects Agency, the Pentagon’s research arm, awarded the first round of grants in a five-year research program called the Mind’s Eye. Its goal is to develop machines that can recognize, analyze and communicate what they see. Mounted on small robots or drones, these smart machines could replace human scouts. “These things, in a sense, could be team members,” said James Donlon, the program’s manager.

In war.

A nurse walks into a hospital room while scanning a clipboard. She greets the patient and washes her hands. She checks and records his heart rate and blood pressure, adjusts the intravenous drip, turns him over to look for bed sores, then heads for the door but does not wash her hands again, as protocol requires. “Pardon the interruption,” declares a recorded women’s voice, with a slight British accent. “Please wash your hands.”

For health care.

The facial-analysis software, Mr. Ross said, could be used in store kiosks or with Webcams. Shopper Sciences, he said, is testing Affectiva’s software with a major retailer and an online dating service, neither of which he would name. The dating service, he said, was analyzing users’ expressions in search of “trigger words” in personal profiles that people found appealing or off-putting.

For sex.

The quadrumvirate of American life circa 2011: prison, war, health care, and sex (ok, maybe not so much the latter). At the risk of turning the Bee Hive into a nicheblog, this article got me thinking about the nature of supply and demand, Evil Corporations, and technology.

As we devote more and more resources to health care, incarceration, and war, we see more and more tech chasing these booming industries. The logic behind it is perverse, but sound. Demand, supply. Yes, the results are kind of evil (unnecessary procedures, overflowing prisons, war in Central Asia), but there's nothing particularly nefarious about the corporations themselves.

For those who haven't seen the show (and seriously, it's a great show), we follow a near-futuristic brothel in Los Angelas which provides Dolls (near-futuristic prostitutes) who have their brains re-wired to satisfy the fantasies of near-futuristic "johns", or to work as spies, hostage negotiators, jewel thieves, etc. for other companies or groups.

There are many such brothels (Dollhouses) all over the world, all of which are subsidiaires of the Rossum Corporation. In the second and final season of the series we begin to uncover the apocalyptic machinations of the leader of Rossum (there's a big twist, btw), who--surprise, surprise--is not interested in money!

Mystery Leader's plan is dastardly to the extreme: his company will robo-call every single phone number in a city! It gets worse. Everyone who answer's the call will have their brain/personality erased by the same technology that allows Rossum to program and de-program the Dolls. They will then be re-programmed as Rossum Soliders to destroy all the people who didn't answer the phone.

Naturally, this begs the question: why would a corporation want to do such a thing? Where is the money in enslaving the world? Mystery Leader's motivations are clear: the technology already exists, so either Rossum deploys the tech-weapons first, or they wait around for another company or terrorist group to do the same.

Here we are faced with an issue that plagued Whedon's most popular show, Buffy the Vampire Slayer, as well as the slightly less popular (but still excellent!) spin-off, Angel. In Buffy, the vampires and demons--when they are not sucking the blood or impaling the poor residents of Sunnydale--are always searching for new ways to End The World. One particular vampire objects, asking why vamps would want to destroy all those little Happy Meals walking on legs.

In Angel, we have a more direct example of corporate evil. The Big Bad in this series is the law firm Wolfram & Hart, which is, as we later discover, the physical manifestation of Hell on Earth. The firm is pure evil and, of course, bent on world domination.

As much as I hate to admit it, Joss Whedon's best work (I'm sorry, Firefly just wasn't that good) is riddled with lazy depictions of the intersection of corporations and technology. Perhaps it's just me, but I find the reality of skyrocketing medical costs, the surveillance state, and counterinsurgency operations far more frightening than world-ending robo-calls.